Fitbit Makes Acquisition to Enhance Health Care Service Offerings

In an effort to bolster its offerings to health insurers and corporate wellness plans, Fitbit is acquiring health care startup Twine Health.

Twine’s service connects people with chronic conditions like diabetes and hypertension with coaches and doctors who then craft plans to help them follow healthier lifestyles. Fitbit, which announced the acquisition on Tuesday, will let users add data from its wearable devices for tracking physical activity, sleep and other vitals to Twine’s service.

The startup is headed by Dr. John Moore, who will join Fitbit as medical director. When he co-founded Twine in 2013, Moore was a researcher at MIT studying how technology could be used to help patients improve their health.

The deal opens the potential to connect Twine with some of Fitbit’s tens of millions of users. “Our biggest challenge has been that we know we can get the outcomes, but getting it out to the people that need it is an incredible challenge,” he says.

The move to acquire the small Boston-based startup comes as Fitbit is still struggling to find its way out of a growth slump that saw sales drop 35% in the first nine months of 2017. One path to expand beyond selling simple health and fitness tracking devices to weekend exercisers is to attract more business from the health care industry and corporate wellness programs.

Still, Fitbit’s stock has been mired in a range of $5 to $7 a share for the past year, after going public in 2015 at $20. It reached a high of over $50 a share in trading in August, 2015.

In the future, Fitbit could partner with hospitals or clinics that want to run the Twine software platform, or integrate Twine’s technology with other software vendors’ offerings in the health care market, Adam Pellegrini, Fitbit’s vice president of digital health, says. “We believe in an ecosystem approach,” he says. “It’s about extending the capabilities of other platforms, not replacing the capabilities of other platforms.”

Last year, Fitbit announced a program in conjunction with health insurer UnitedHealthcare (unh) called Motion that pays participants up to $1,500 in credits if they meet certain health goals.

Still, the health services push may take years to play out in a significant way for Fitbit’s (fit) financial results. “Obviously it’s still in the very early days,” Fitbit CEO James Park said. “We’re starting to put together all the pieces…this acquisition of Twine also will help our momentum in building more of a bigger revenue business on the health side.”